Announcing the special incentive package for the semiconductor industry and industries manufacturing other advanced micro and nano technology products, the government has said that units can claim incentives in the form of capital subsidy or equity participation. The equity participation from the government cannot exceed 26 per cent and the capital subsidy can be in the form of investment grants and interest subsidies. Last month, an incentive of 20 per cent of capital expenditure was announced for units in SEZs and 25 per cent of capital expenditure for non-SEZ units. The threshold of investment for fab units is Rs 2,500 crore and above and that for the manufacture of other eco-system products is Rs 1,000 crore. The policy statement also says that there would be a ceiling on the number of units to be set up — 2-3 fab units and 10 eco system units. Reacting to this, India Semiconductor Association president Poornima Shenoy said that the association hopes the government would review the ceiling in a couple of years. Commenting on the cap, IT minister Dayanidhi Maran said that the Indian ecosystem can accommodate 2-3 units. “Leading manufacturers have shown interest. We will pick the best,” he said. The lack of a policy had led the world’s largest chipmaker, Intel, to set up its unit in Israel. When The Indian Express contacted Intel after the policy was announced, the company said that it did not have anything to announce at this point of time. Maran had said that he would write to Intel and take up negotiations.
